Amazon is now selling private-label perishables

Amazon started to sell private-label coffee and baby food on its website this week, though the products will only be available to Amazon Prime members.

The company is offering whole-bean and ground coffee under the Happy Belly label, while its bottled baby food will be sold under the Mama Bear label, according to the Wall Street Journal.

These are not the first private-label brands to be sold by Amazon, as it launched Elements last year. Elements includes more than two dozen food and household items and is also only available for Prime members. However, the company launched its first private-label apparel line in February, which is available to all customers.

Amazon plans to expand its private-label brands in food, diapers, and cleaning supplies to increase profit margins without having to discount goods. It's currently selling 12-ounce bags of Happy Belly coffee for $9.99. Comparatively, Starbucks sells 12-ounce coffee bags in the range of $7.95 to $13.95, depending on the flavor. Amazon's Mama Bear bottled baby food is priced at $12.49 for a dozen four-ounce bottles, which is comparable to competitors' pricing.

By expanding its private-label offerings, Amazon likely hopes to gain greater control over its margins, while also being able to better manage packaging and distribution. This could be troublesome for third-party sellers on Amazon, as they'll now have to compete with Amazon's own products. What's more, those products are likely being developed based on the demand Amazon has seen through third-party sales.

Amazon's decision to sell private-label perishables comes as it looks to ramp up its online grocery business, AmazonFresh. AmazonFresh, which costs $299 a year, offers free same-day delivery for a large variety of grocery items to consumers located in select cities. Amazon recently expanded AmazonFresh to Boston, making it the ninth US market to offer the service. Amazon may look to expand its private-label perishables to grow its online grocery business, as AmazonFresh expands to new markets.